In the case of Sanrio Company Limited v Edgar C Lim (doing business as Orignamura Trading (GR No 168662)), the Supreme Court of the Philippines ruled on February 19 2008 that in the absence of grave abuse of discretion, the factual findings of the Department of Justice (DOJ) in preliminary investigations will not be disturbed. The facts are as follows: Sanrio, a Japanese corporation, owns the copyright to various animated characters including Hello Kitty, Little Twin Stars, My Melody and Tuxedo Sam. It sold its products through its exclusive distributor Gift Gate who entered into licensing agreements with JC Lucas Creative Products, Paper Line Graphics and Melawares Manufacturing Corporation. These companies were allowed to manufacture certain products bearing the animated characters for the local market.
Due to the proliferation of counterfeit products, Gift Gate carried out market research that confirmed that Orignamura Trading was selling imitation Sanrio products. By virtue of a search warrant issued by the Regional Trial Court of Manila, the premises of Orignamura Trading were searched and the authorities seized various counterfeit Sanrio Products. On April 4 2002, Sanrio, through its attorney in fact, filed a complaint affidavit before the Department of Justice for copyright infringement. Respondent Orignamura claimed the following in defence: (i) he committed no violation of the IP Code because he was only a retailer; (ii) he neither reproduced nor manufactured any of Sanrio's copyright items and therefore he did not transgress the economic rights of Sanrio; and (iii) he obtained his merchandise from authorized manufacturers of Sanrio products such as JC Lucas Creative Products, Paper Line Graphics and Melawares Manufacturing Corporation and relied on the representations of these companies that the items they sold were genuine. Thus, as far as Orignamura was concerned, the items in his possession were not infringing copies of the original Sanrio products. The DOJ dismissed Sanrio's complaint due to insufficient evidence.
Sanrio appealed to the Court of Appeals. On the merits of the case, the Court concluded that the DOJ did not commit grave abuse of discretion in dismissing the case. It held that to be criminally liable for copyright infringement, the following requisites must be present: (i) possession of the infringing copy; and (ii) knowledge or suspicion that the copy is an infringement of the genuine article. The Court agreed with the DOJ that Sanrio had failed to prove that Orignamura knew that the merchandise he sold was counterfeit. Orignamura on the other hand was able to show that he obtained the counterfeit goods from legitimate sources.
The Supreme Court affirmed the decision of the Court of Appeals. The Supreme Court held that in a preliminary investigation, a public prosecutor determines whether a crime has been committed and whether there is probable cause that the accused is guilty of. Probable cause is defined as such facts and circumstances that will engender a well-founded belief that a crime has been committed and that the respondent is probably guilty and should be held for trial. Because a public prosecutor is the one conducting the preliminary investigation, he determines the existence of probable cause. Consequently, the decision to file a criminal information in court or to dismiss a complaint depends on his sound discretion. As a general rule, a public prosecutor is afforded a wide latitude of discretion in the conduct of a preliminary investigation, and the courts generally do not interfere with the results of such proceedings except where the respondent has exercised his discretion in an arbitrary, capricious, whimsical or despotic manner. The prosecutors in the instant case consistently found no probable cause existed against respondent for violation of the IP Code. Hence, the Supreme Court found that the prosecutors arrived at their findings after carefully evaluating the respective evidence of the petitioner and respondent.
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| Editha R Hechanova |
Hechanova Bugay & Vilchez
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Philippines
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editharh@info.com.ph
